Governor Newsom Faces Budget Deficit Challenge with Upcoming Fiscal Proposals

Takeaways:

• California faces a $68 billion budget deficit, and Governor Gavin Newsom is set to detail his proposed budget for the 2024-25 fiscal year.

• The Legislative Analyst’s Office (LAO) suggests Newsom may declare a fiscal emergency to access $24 billion in reserve funds, recommending only using half to leave a cushion for future shortfalls.

• Education funding may see cuts, with nearly $19 million less in the general fund for schools and community colleges than previously estimated, despite being guided by Proposition 98's minimum funding requirements.

• There is debate over the Medi-Cal expansion for undocumented immigrants, which costs about $3.1 billion per year, with differing opinions among Republican lawmakers on its fiscal responsibility.

• Previous investments in climate change may face further cuts, and there is a possibility of revising the 2023-2024 budget to align spending with actual revenue, as initial financial projections were overly optimistic.

References:

[1] California has a $68 billion deficit. Here are 5 ways Gavin Newsom could address the budget. Link

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